Envirofit Case Study

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Envirofit, in their effort to reduce indoor air pollution (IAP) in India via low emission cookstoves, faced a number of challenges between from 2007-2011 leading up to the meeting on April 2, 2011 between Harish Anchan and Envirofit’s Board. In the following, three large challenges will be examined to lead into the one small challenge which I posit is holding back revenue. From this a recommendation will be made for what Mr. Anchan should do to increase sales.

The first challenge was Envirofit’s goal in India, which is to prevent the deaths of the 500,000 people, mostly women and children, who die there annually from IAP. Their target market is BoP’s (“base of the pyramid”, which are households earning $2-$7 per day) and their solution is …show more content…

These challenges in large dealt with the logistics of bringing product to market and the accompanying IAP awareness campaign. Envirofit navigated Indian regulation by setting up a for-profit to sell the cookstoves and a non-profit to advocate for its use and benefits. On the product side, they utilized the technical know-how of Colorado State University and Oakridge National Laboratories to develop the cookstove and subcontracted out all production to a firm in China whose expertise and ability to scale ensured durability and affordability. On the consumer side, to address the challenge of India’s 15 official language, 300 dialects, and ethnic, regional, religious, and culinary diversity, Envirofit and the Shell Foundation raised awareness about IAP and their cookstove through product videos aired in local languages, product demonstrations, infomercials, site visits, and best practices based on customer feedback. Envirofit did navigate these challenges successfully and brought product to market in …show more content…

Cookstove sales were not enough to support the operating costs of Envirofit enterprise model of operation, which includes import costs, a 20% VAT on imported stoves, administrative overhead in India and in the U.S., R&D, costs associated with raising awareness, and, for the for-profit subsidiary, taxes on earned income. This model is expensive to make money on, even more so when the market is BoP households who have little disposable income and, it is assumed, already have a cookstove. From the last line of the case, “The big question…was how to increase sales of the Envirofit cookstove without the burden of incurring additional incremental costs that would distress profits and affect the company’s sustainability in the long run.” This is the challenge of every business, whether profit or socially driven. Revenue must be more than costs in order to

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